Comment by Riaz Haq on August 19, 2017 at 8:29am

#Pakistan's new PM charges ahead with reforms. #energy, #economy, #civil #military ties, - Nikkei Asian Review

https://asia.nikkei.com/Politics-Economy/Policy-Politics/Pakistan-s...

As soon as he became chairman of the Economic Coordination Committee, or ECC, the government's highest decision-making body for economic policies, Abbasi founded Ministry of Energy by merging of Ministry of Petroleum and Natural Resources and the Ministry of Water and Power to accelerate construction of the power infrastructure so essential for economic growth.

The new prime minister appointed former Minister of Planning and Development Ahsan Iqbal, one of his most able cabinet members in the area of economic reform, as minister of interior. Abbasi is also keeping a close eye on security, especially in preventing terrorism and deterring organized crime.

The business sector has welcomed the new prime minister. If he follows the previous government's policies that proved moderately successful in implementing reforms and achieving high economic growth, the ruling Pakistan Muslim League (Nawaz), or PML-N, could likely overcome the Sharif scandal and do relatively well in next summer's general election.

Key ministries merge

Merging government offices in charge of energy policy had been discussed in order to deal with the massive power shortage, which has exceeded 5000 megawatts. But the merger failed to materialize due to lack of political will within the ruling party and the government.

Since his days as minister of petroleum and natural resources, Abbasi has been pushing for construction of liquefied natural gas terminals and development of gas fields. The creation of the ministry of energy jibes with his long-held view that the country should expand gas-based power generation to address energy shortages.

Finance Minister Ishaq Dar, who oversaw economic and fiscal policies, was the key player in the previous cabinet. But he gave up ECC chairmanship to Abbasi because of a Supreme Court order to investigate allegations that he illicitly amassed personal wealth. This clearly shows that the power center has shifted within Pakistan.

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In mid-August, Abbasi met prominent business leaders in the country's commercial hub of Karachi, where he personally answered their questions and addressed concerns. "[We are] really impressed they are overcoming the damage by the disqualification of the former PM and [are] much more united," said one of the participants. "[Abbasi's] business practice is much better than his predecessor."

Pakistan's economy is projected to achieve growth of more than 5% in the fiscal year that ended in June, due in large part to support from the International Monetary Fund, projects related to the China-Pakistan Economic Corridor, expansion of foreign investment, and a recovery in personal spending. This would be the highest growth rate in 9 years.

The fiscal deficit is moderately expanding due to pork-barrel projects ahead of the general election, and exports aren't growing as expected. But investors at home and abroad are showing more faith in the government because of the improved energy and security situations.

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"The new prime minister is a businessman turned politician, having run the state airline and set up a low-cost carrier," says Ehsan Malik, CEO of the Pakistan Business Council, a leading think tank on economic policies. "He has deep understanding of business and economic priorities. He is also a good listener and a quick decision-maker."

Malik is also optimistic about the ruling party's recovery from the Sharif scandal. "Notwithstanding the change of leadership, the PML-N government will complete its five-year term," he says.

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